Recommended Stories:

His employment offer letter calls for an initial annual salary of $175,000 and a whopping $7.4 million bonus, paid out in five annual installments.

In 2000, he received $1.25 million of that signing bonus.

He was paid another $666,667 as a portion of a special bonus paid by the Seattle-based online retailer. This brought his total bonus for the year to nearly $2 million, according to the company’s recently released proxy.

Under that special bonus, granted on May 2000, Jenson is to receive a value of $1 million, payable in equal monthly installments over a one- year period, beginning with his paycheck for May 2000. In the event his employment is terminated for any reason prior to payment of the entire amount of this bonus, he will forfeit all subsequent installments of this bonus.

Jenson’s salary in 2000 was $177,450. He also received $1,308 in other compensation, most of which represents relocation expenses.

His total 2000 Compensation: $2,095,425.

In 1999, the portion of the signing bonus came to $2.15 million.

That year, his salary was $55,679. He also received $3,185 from a tax benefit in connection with relocation expenses. In addition, he received $100,000 from a confidentiality, non-competition and invention assignment agreement with the company and $5,525 for relocation expenses. Total Compensation: $2,314,389.

Under the signing bonus agreement, in the event Jenson’s employment is terminated for any reason during the first five years, he must reimburse the company for that year’s installment of the signing bonus on a pro-rated monthly basis, and he will forfeit all subsequent installments.

As additional consideration for entering into a confidentiality, non- competition and invention assignment agreement with the company, Jenson was paid $100,000 at the time of his first regular paycheck. Amazon also granted Jenson an option to purchase 2 million shares of the company’s common stock. This option, which was granted on September 7, 1999 at an exercise price of $63.25 per share (which was the fair market value of the common stock on the grant date), vested in equal annual installments over a 20-year period from the grant date. It had a term expiring December 7, 2019.

However, on January 31, 2001, Jenson exchanged this option and all other options previously granted to him for a new option to purchase 346,667 shares of common stock. The exercise price is $13.375 per share, with a term ending September 30, 2003. This new option vests and becomes exercisable at the rate of 25 percent on August 14, 2001, and 4.167 percent on the 14th day of each month thereafter until fully vested on February 14, 2003.

Amazon’s stock closed at $13.32 on Thursday.

In 2000, Amazon’s net sales were $2.76 billion, a 68 percent increase over 1999 net sales of $1.64 billion. However, the company still experienced a $1.4 billion loss in 2000, compared to a $720 million loss in 1999. The company’s stock has been a long-time favorite among Wall Street’s short sellers, who have been skeptical of the company’s ability to ever make a profit in the future.

On April 11, 2001, Moody’s Investors Service revised its outlook for Amazon’s junk-rated debt to positive from stable. Its shares rose 10.9 percent on Wednesday and its bonds also rose.

According to Moody’s, a positive outlook suggests conditions are present that may make an upgrade possible, not that an upgrade is imminent. “The risk of Amazon’s business model and capital structure remains high,” Moody’s said. “However, Moody’s believes that management’s focus on achieving profitability, and a clearer strategy to harvest the investment in existing operations rather than expend capital on new businesses, holds the potential for positive cash flow within the medium term.”

Before joining Amazon, Jenson spent 1½ years as CFO of Delta Air Lines. While at the airline, Jenson was involved in a celebrated incident when his kids bumped some first-class ticket-holders into coach and delayed a flight. See CFO magazine story from 1999.